As the Dow Jones index slid Monday below the 8,000 level for the first time since October 1998, the world’s larger agency groups experienced mixed fortunes.
The largest, WPP Group, saw its shares fall by over three per cent – although this may have been as much due to investors’ concern over criticisms of its accounting methods as to global stock market jitters. By Monday’s closing bell at the London Stock Exchange WPP stock had fallen to £4.585 – 14 pence down on Friday’s close – but at 08.15 BST today (Tuesday) it had rallied to £4.695.
Stateside, however, Monday’s agency picture was rosier with gains across most US advertising stocks. Omnicom Group rose marginally by 0.64% to $50.30 and Grey Global Group lifted 1.14% to $710.00.
But back in London the gloom enveloped agencies and media alike. In Monday afternoon trading Aegis Group fell 0.56% to £0.8875, ebbing Tuesday morning to £0.8575; Cordiant Communications languished 2% to £0.735 and opened at the same figure on Tuesday. BSkyB shares sagged by 3.27% to £5.76, opening even lower Tuesday at £5.635; and the Daily Mail & General Trust plunged 6.5% from £5.48 on Monday before a hesitant recovery at Tuesday’s opening to £5.425.
The overall slump in the Dow Jones index was exacerbated by investor concerns over corporate crookedness, revelations of which now crawl from the woodwork daily. Monday’s closing index stood at 7,784.44, the day’s fall effectively wiping out all the gains made during the dotcom feeding-frenzy of the late 90s.
But before the breast-beating becomes too deafening, WAMN recalls the remark made back in June by no less a personage than US treasury secretary Paul O’Neill who declared the markets “grossly overvalued”. Many observers believe the current turmoil is nothing more than a long overdue correction of the dotcom/techno-stock insanity of three years back.
Data sourced from: BBC Online Business News (UK) and BrandRepublic (UK); additional content by WARC staff